Italian populists sought to blame the European Central Bank for the rising risk to banks as the country appeared increasingly isolated in a standoff with the European Commission over its budget for next year.

“We are in a time when we have to support Italy and I’m surprised that an Italian is poisoning the climate further this way," Deputy Premier Luigi Di Maio was cited by newswire Ansa as saying during the recording of an interview to be aired later Friday on state broadcaster Rai. Di Maio was commenting on remarks made by the ECB’s Rome-born President Mario Draghi earlier this week.

With the government doubling down on a controversial deficit target of 2.4 percent of output for 2019, Austrian Chancellor Sebastian Kurz, whose country holds the European Union’s rotating presidency, called Italy’s budget proposal “unacceptable in its current form.”

On Thursday Draghi called on the Italian administration to tone down its rhetoric, stop questioning the euro and act to bring down borrowing costs threatening the banking system.

Senate finance committee head Alberto Bagnai said it’s “absurd that the ECB president says there is a risk."

“He is supposed to manage that risk,” Bagnai, a member of coalition member and nationalist party the League, said in a radio interview with Rai.

The populist coalition seized power after March’s election by stirring up Italian frustrations with years of economic stagnation and blaming the European Union for many of the country’s ills. Now they are faced with the challenge of delivering on their promises, with investors growing increasingly concerned about how they’ll pay for them.

“We must show that we will not permit a ‘second Greece’ to happen,” Austria’s Kurz said in a Friday interview with daily Il Sole 24 Ore.

ECB Powers

Italy’s European Affairs Minister Paolo Savona said the government doesn’t intend to change its budget plan, even if the Italy-Germany bond spread widens further. Speaking in an interview with Sky TG24 television, Savona said Draghi should be given a broader remit so that he can take responsibility for stabilizing bond yields.

Some Italian political leaders have acknowledged that the current bond-yield spread with German bunds could harm local banks that have stockpiled government securities. If bond-market volatility takes a severe enough toll on the country’s lenders, the government could make use of 15 billion euros ($17 billion) left in a fund set by the previous administration, newspaper La Stampa reported Friday morning.

Draghi on Thursday also said he expects Rome and the EU to reach a deal, while citing concerns over the financial health of his native Italy, where the yield on 10-year bonds has almost doubled since elections in March.

Bagnai said it’s “inappropriate” for Draghi to be highlighting risks in Italian banks because he is responsible for their supervision.

The 10-year yield spread between Italy and Germany was up 8 basis points at 318 basis points as of 11:55 a.m. in Rome.

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Euro Commitment

Finance Minister Giovanni Tria, speaking in Paris a few hours after Draghi’s comments, said that Italy’s faith in the euro “doesn’t prevent us from asking if policies of Europe have promoted convergence, or divergence.” He added that Italy’s position on the budget doesn’t imply any disrespect for European treaties.

“We Italians also built this house, there is no way we want to leave it,” he said.

Bagnai’s League colleague Claudio Borghi, who heads the budget committee in the lower house, told Bloomberg that Draghi’s remarks on Italy’s euro membership may cause problems for Italian banks. Borghi said he was surprised by Draghi’s comments.

Later on Friday, S&P Global Ratings is scheduled to review Italy, just a week after Moody’s Investors Service cut the nation’s rating to just one notch above non-investment grade and set the outlook at “stable.” Borghi said he expects S&P to take a “moderate” decision, without elaborating.